ASX futures were 6 points or 0.08% higher at 6981 at 7.00am Friday AEDT to continue the gains at the open.
Stocks have largely declined in recent sessions as money managers prepare for comments from Federal Reserve Chairman Jerome Powell in Wyoming on Friday. Some are betting that he will lay out the argument for pressing ahead with interest-rate increases to squelch inflation that is at the highest level in decades a position that could put the brakes on the rally that took off in mid-June. A significant slowdown of China’s economy is also on the list of what investors are concerned about.
Investors are betting on what Mr. Powell’s tone will sound like and whether it suggests big rate increases are still ahead. The S&P 500 rose 1.4 percent on Thursday, and the technology-focused Nasdaq Composite Index climbed 1.7 percent. The Dow Jones Industrial Average gained 1 percent.
And some analysts believe stocks will face more volatility after Mr. Powell speaks. “What I am somewhat doubtful of is that this sort of this better tone, together with this softer dollar, can be sustained once we’ve got the Fed there,” said Jane Foley, senior foreign-exchange strategist at Rabobank. “Even if it’s not as hawkish as the uber-hawks are expecting, it’s still going to be pretty hawkish.”
Commodities Market sees Brent crude oil down $1.64 a barrel, gold rose 0.4% to US$1,757.89.
Locally, Australian 2 year yields lifted to 3.01% and 10 year to 3.67%. Yields, at the open Over Seas The 2 Year US Treasury t note yield 3.37% and it's 10 year t note: 3.03%.
The Australian dollar jumped to 69.78 US cents from Thursday's close of 69.07. The Wall Street Journal Dollar Index, which measures the U.S. currency against 16 others, slipped to 99.49.
Asia
Shares in China ended the day mixed, as investors continued to fret over the country’s worst heat wave in 60 years. The benchmark Shanghai Composite Index rose 1.0% to 3246.25, while the Shenzhen Composite Index fell 0.2% to 2155.14 and the ChiNext Price Index shed 0.4% to 2667.30. Economic measure developments were also expected to be in focus, after the country’s State Council unveiled a policy package to support its economy hobbled by Covid-19 curbs as well as a lower property sector and power shortages, CBA strategist Carol Kong said. “In our opinion, the extent of the stimulus to flow to the real economy will depend mostly on the way local governments implement the policies,” she said.
The Hang Seng Index in Hong Kong added 3.6% to 19968.38 in today's half-day session, notching its biggest one-day percentage gain in nearly four months. The market, which closed at a five-month low on Wednesday, rebounded after Beijing promised further measures to underpin economic growth. Tech shares surged, with the Hang Seng Tech index up 6.0 percent at 4268.54. JD.com shot up 11%, and Baidu, Alibaba Group and Meituan all rose 8% or more. China Mengniu Dairy rose 9.2% after saying 1H profit rose 27% on year. China Tourism Group closed about flat on its first day of trading. The morning session was called off because of a typhoon warning.
Japanese Stocks Finish Up
Japanese stocks close higher, boosted by gains in tech and pharmaceutical issues, on the back of bargain hunting, following recent selloffs on concerns about further Fed tightening. Fujitsu Ltd. rises 2.9% and Daiichi Sankyo is up 4.6%. The Nikkei Stock Average is up 0.6% at 28479.01. Economic numbers remain in the spotlight, with U.S. weekly jobless claims on tap later in the day ahead of a speech from Fed Chair Jerome Powell Friday. The dollar is at 136.70 yen compared with 137.13 late Wednesday in New York. The yield on the 10-year Japanese government bond adds half a basis point to 0.225%.
Europe
For its part, the pan-European STOXX Europe 600 Index has added 1.31 points, or 0.30%, to 433.36, while German DAX is up 51.90 points or 0.39%; and French CAC 40 Index is falling by 5.20 points or 0.08% to 6381.56.
Back over in London and the FTSE 100 index is 8.23 points higher at 7479.74 as oil and mining stocks edge into gains on the back of rising commodity prices. Harbour Energy, the North Sea oil & gas firm created last year by the merger of Chrysaor Holdings and Premier Oil, was 10% higher after it posted first-half narrowing pre tax losses and revenues up slightly on higher oil and gas prices.
BP and Shell also advanced, with the price of Brent crude climbing 0.8% to $101.16 a barrel. At the same time, Anglo American, Antofagasta, Glencore and BHP Group are some of the biggest mining risers as gold and silver prices rally and most base-metal prices make headway, too. Elsewhere, Irish building-material supplier CRH rose 4% after posting a higher first-half pretax profit.
North America
Investors are betting on how Mr. Powell’s tone will sound and whether it suggests that big rate increases remain to come. StocksThe S&P 500 rose 1.4% on Thursday, while the technology-heavy Nasdaq Composite Index was up 1.7%. The Dow Jones Industrial Average rose 1 percent.
Stocks are expected to face further volatility following Mr. Powell’s speech, some analysts say. The yearly symposium begins Thursday. Mr. Powell is set to speak on Friday, followed by Isabel Schnabel, a board member of the European Central Bank, on Saturday.
Mr. Powell’s remarks will tee up the debate among Fed officials for their next policy meeting on Sept. 20-21, most likely over whether to raise rates by a half percentage point or 0.75 point. But while officials concurred at their most recent meeting last month that they had to keep raising interest rates, they signaled more caution about the pace of future increases.
On top of the rate rises, “the central bank may also speed up the pace of its balance-sheet reduction around the September meeting, which could hit the economy harder than the market had been anticipating,” said Jason Pride, chief investment officer of private wealth at Glenmede.
“Our feeling is that we’re not done here,” Mr. Pride said. “Really, it takes longer than that for the impact economically of excess inflation, Fed rate hikes, and monetary policy adjustments to be felt on the economy and on the part of the corporations in terms of the way they respond and they’re managing guidance out on the street.
Thin summer trading could be exaggerating moves, analysts said. Only 8.84 billion shares in stocks listed on the New York Stock Exchange, the Nasdaq and two other smaller exchanges traded hands on Wednesday the lowest volume since New Year’s Eve of last year, according to data from Dow Jones Market Data.
Shares of the electric-vehicle maker Tesla slipped 0.35% after a 3-for-1 split of the company’s shares took effect late Wednesday. Peloton Interactive retreated 19 percent after its performance in the pandemic darling posted a quarterly loss of $1.2 billion. Shares of Snowflake rose 23% after the cloud-software company outpaced revenue expectations for its most recent quarter.
Elsewhere on the economic front, claims for new unemployment benefits last week dropped to 243,000, from a revised 245,000 the previous week.
The move helped fuel a ramp-up of the U.S. housing market as did mortgage rates that were hovering at historical lows, down about 3.9% from 6.34% in Nov. 2002. Pressuring the fast-cooling housing market, the average rate on a 30-year fixed mortgage jumped 20 basis points to 5.55% this week, the highest since June.
